Inclusive Trade and Poverty Alleviation: Building a Framework for Global Economic Integration

Abstract

This article develops a policy framework for designing inclusive trade agreements that actively reduce poverty within an increasingly unequal global economy. Drawing on classical and modern trade theories, it argues that while openness raises aggregate income through specialization, productivity, and variety, distributional effects depend on institutional design and implementation. A review of empirical evidence from developing and advanced economies shows that trade can improve welfare for low-income groups when tariff reforms target essential goods, when export growth occurs in labor-intensive sectors, and when small firms can access markets with lower compliance costs. However, existing scholarship rarely connects specific treaty provisions to measurable poverty outcomes. The article proposes a four-channel framework covering prices, jobs, entry, and resilience, which are linked to concrete indicators and applied across major agreements, including AfCFTA, USMCA, and the EU’s GSP+. It concludes that enforceable labor standards, simplified trade procedures, targeted development aid, and gender-responsive digital rules can make globalization more equitable when paired with capacity building and transparent monitoring.